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Congratulations, it's your lucky day! You've just won $5,000!
You're guaranteed to win a fabulous diamond ring,
luxury vacation or new car!
If you receive a letter or phone call with a message like this, be skeptical. The $5,000 "prize" may cost you hundreds of dollars in taxes or service charges — and never arrive. Your "fabulous" prize may not be worth collecting. The diamond is likely to be the size of a pinhead. The "vacation" could be one night in a seedy motel, and the ATV, nothing more than a lounge chair on wheels!
Scam artists often use the promise of a valuable prize or award to entice consumers to send money, buy overpriced products or services, or contribute to bogus charities. People who fall for their ploys may end up paying far more than their "prizes" are worth, if they get a prize at all.
What these people are likely to get — especially if they signed up for a contest drawing at a public place or event — may be more than they bargained for: more promotions in the mail, more telemarketing calls and more unsolicited commercial email, or "spam." This is because many prize promoters sell the information they collect to advertisers.
Worse yet, contest entrants might subject themselves to a bogus prize promotion scam.
Everyone loves to be a winner. A recent research poll showed that more than half of all American adults entered sweepstakes within the past year. Most of these contests were run by reputable marketers and non-profit organizations to promote their products and services. Some lucky winners received millions of dollars or valuable prizes.
Capitalizing on the popularity of these offers, some con artists disguise their schemes to look legitimate. An alarming number of people take the bait. Every day, consumers throughout the United States lose thousands of dollars to unscrupulous prize promoters. During 1999 alone, the Federal Trade Commission received more than 10,000 complaints from consumers about gifts, sweepstakes and prize promotions. Many received telephone calls or postcards telling them they'd won a big prize — only to find out that to claim it, they had to buy something or pay as much as $10,000 in fees or other charges.
There's a big difference between legitimate sweepstakes and fraudulent ones. Prizes in legitimate contests are awarded solely by chance, and contestants don't have to pay a fee or buy something to enter or increase their odds of winning. In fraudulent schemes, however, "winners" almost always have to dip into their pockets to enter a contest or collect their "prize."
There's one notable exception: skill contests. These are puzzles, games or other contests in which prizes are awarded based on skill, knowledge or talent — not on chance. Contestants might be required to write a jingle, solve a puzzle or answer questions correctly to win.
Unlike sweepstakes, skill contests may legally require contestants to buy something or make a payment or donation to enter.
It's important to recognize that many consumers are deceptively lured into playing skill contests by easy initial questions or puzzles. Once they've sent their money and become "hooked," the questions get harder and the entry fees get steeper. Entrants in these contests rarely receive anything for their money and effort.
Several consumer laws help protect consumers against fraudulent sweepstakes and prize offers promoted through the mail or by phone.
Telemarketers frequently use sweepstakes and prize contests to sell magazines or other goods and services. These telemarketers make an initial contact with consumers through "cold calls," or take calls from consumers who are responding to a solicitation they received by mail.
The Telemarketing Sales Rule helps protect consumers from fraudulent telemarketers who use prize promotions as a lure. In every telemarketing call involving a prize promotion, the law requires telemarketers to tell you:
The Telemarketing Sales Rule prohibits telemarketers from misrepresenting any of these facts, as well as the nature or value of the prizes. It also requires telemarketers who call you to pitch a prize promotion to tell you before they describe the prize that you don't have to buy or pay anything to enter or win.
Many sweepstakes promotions arrive by mail as a letter or postcard that instructs the consumer to respond by return mail or phone to enter a contest or collect a prize.
The Deceptive Mail Prevention and Enforcement Act helps protect consumers against fraudulent sweepstakes promotions sent through the mail. The law prohibits:
Skill contests also are covered by the new Deceptive Mail Prevention and Enforcement Act. The law requires the sponsors to disclose in a clear and conspicuous way:
The next time you get a "personal" letter or telephone call telling you "it's your lucky day," the Federal Trade Commission encourages you to remember that:
Another way to protect yourself is to request that your name be removed from mail and telephone solicitation lists.
The Telemarketing Sales Rule requires telemarketers to keep a "do not call" list of consumers who have asked not to be called again. Calling a consumer who has made this request is illegal and can subject the telemarketer to a hefty fine.
The Deceptive Mail Prevention and Enforcement Act requires companies that use direct mail to maintain a similar "do not mail" list for consumers who call or write and ask that their name be removed from the mailing list. This new law gives caregivers the right to have the names of the friends and loved ones under their care removed from the mailing lists of undesirable solicitors.
Another way to reduce mail and telephone solicitations is to contact the Direct Marketing Association to request that your name be placed on its "do not call," "do not mail" and "do not email" lists. Association members agree not to solicit consumers who have requested that they not be contacted.
To have your name removed from direct mail marketing lists, write:
Direct Marketing Association
Mail Preference Service
PO Box 9008
Farmingdale, NY 11735-9008.
To have your name removed from telemarketing lists, write:
Direct Marketing Association
Telephone Preference Service
PO Box 9014
Farmingdale, NY 11735-9014.
To "opt out" of receiving unsolicited commercial email, use the DMA's form at http://www.e-mps.org/.
The FTC works for the consumer to prevent fraud, deception and unfair business practices in the marketplace. The FTC enforces federal consumer protection laws and provides free information to help consumers spot and avoid fraud and deception. Much of this information is posted at http://www.ftc.gov/.
Consumers who believe they have been victimized by fraudulent promotional offers also should contact their local postmaster or the U.S. Postal Inspection Service by phone, toll-free, at: 1-888-877-7644; by email at: http://www.uspsoig.gov/; or by mail at:
U.S. Postal Inspection Service
Office of Inspector General
Operations Support Group
222 S. Riverside Plaza, Suite 1250
Chicago, IL 60606-6100.
If you have a problem with a sweepstakes or prize promotion after participating, and you are unable to resolve the problem directly with the company, contact:
Note: The links on this page that go to web sites outside of this agency's control are provided as a convenience only. The Department takes no responsibility for their content.